Purchasing a home in cash in 2019 - when to cash out investments?

Hey folks, I'm a semi-retired small business owner. I have about $750k in investments and I'm looking to buy a $250k house in cash next year because I won't be able to secure a good mortgage and don't want a mortgage when income is so variable. Business income is currently nominal.

I will begin looking some time in Feb/March 2019 and will buy as soon as I find what I'm looking for (somewhat specific criteria in a highly competitive market so could be a while, but hoping cash position makes it easier).

Right now my money is invested in index funds. I'm harvesting cap gains so the tax burden of selling off that position hopefully won't be too crazy.

So my big question is - when should I pull out and sit on the cash? Since I'm not looking for another 3 months, I hesitate to do it now since the search could take another 3 months, meaning 6 months of cash out of the market. But I don't want to be stressing out about gains and losses when I might need the cash at any moment. If the market were to completely crash, I would be able to wait for it to recover, though I'd be very disappointed.

My instinct says to do it right when I begin the house hunt in earnest. Thoughts? Bonus question, should I sit on it in cash (well, Vanguard's Money Market fund) or put it in some other kind of conservative investment like bonds?

Due to fraud, closing agents want to have wires received two weeks before the settlement date, to make sure the wire is real. Sellers will want proof of funds with offers but statements from brokers will be acceptable.

So other than two weeks before closing, it really comes down to whether you the think the market is heading up or down.

Nobody has an idea of that. Those who have are rich :P Anyway, its your decision. If you wanna be safe then you should cash immediately and put your money in a safe investment, like a CD (there are many no-penalty CD that you can withdraw at any time). The more you wait the more you gamble. The market could go up 20% or it could go down 50%. If you are getting close to the date you need the money you lose flexibility in the decision on "when" to sell. You might be forced to sell and you might lose a lot of money in the process.

So, its your choice.

Do you think Trump tariffs and Brexit will have no effect on the good state of the economy and the market is oversold --> Wait.

Great advice. I think I am going to begin cashing out this year and putting into no-penalty CD (need to do that anyway to avoid excessive cap gains next year). I can do that a bit at the time to make it more emotionally palatable and also get some dollar cost averaging action...

Before I saw this, I was going to chime in and suggest you start to move money to CDs. I think the market is much more likely to have a big drop than to go gangbusters. Personally, in your situation, I would rather safeguard against the risk of a big drop over the likely small return from staying in the market the next 6 months.

Big drop could be immediately imminent. Not sure what to do anymore... Cashing out all $200k+ right now seems like a huge risk and I wasn't planning on absorbing all the cap gains this year (was gonna spread between this year and next)

Could be, but maybe not, December can be good for lots of economic sectors. You could sell part now and part in early January to straddle the tax years. It is tough. Just have to decide if heading off the risk of a drop is worth the cap gains, then sell what you are comfortable with for 2018. You won’t get it perfect and that is OK.

I’ve cashed out my downpayment a few months ago and put it into money market which returns about 2%. In my opinion, is better to secure your downpayment for the peach of mind. Your timeframe depends on when in 2019 you will buy.